Chartered Online Celebrates 1,00,000 Plus Subscribers

27 January, 2017

Print to PDF

How to Start Management Consultancy Business?

How to Start Management Consultancy Business?
A consultant (from Latin: consultare "to deliberate") is a professional who provides expert advice in a particular area such as security (electronic or physical), management, education, accountancy, law, human resources, marketing (and public relations), finance, engineering, science or any of many other specialized fields.
In simple words ‘consultant’ is person expert in particular field who work as an advisor either to accompany or to another individual.
C:\Users\Gravita\Desktop\Clients\How to start(start ups)\Top-Management-Consulting-Firms-Review-min.png
  1. Entity of consultancy business
For giving consultancy firm a legal entity there are following options:
    1. Sole proprietorship
    2. Partnership firm
    3. Limited Liability Partnership firm
    4. Private limited Company
    5. One person Company
If you want to start business alone and have low budget than sole proprietorship is better option. If there is no such budget issue than you should register your business as one person company.
On other hand if, two or more person have idea to start business than partnership firm, limited liability partnership firm and private limited company is better option.
  1. Top 10 consulting business thriving today are as below:
1. Accounting: Accounting is something that every business needs, no matter how large or small. Accounting consultants can help a business with all of its financial needs.
2. Advertising: This type of consultant is normally hired by a business to develop a good strategic advertising campaign.
3. Auditing: From consultants who audit utility bills for small businesses to consultants who handle major work for telecommunications firms, auditing consultants are enjoying the fruits of their labor.
4. Business: Know how to help a business turn a profit? If you have a good business sense, then you'll do well as a business consultant. After computer consulting, people in this field are the next most sought after.
5. Business writing: Everyone knows that most businesspeople have trouble when it comes to writing a report--or even a simple memo. Enter the business writing consultant, and everyone is happy!
6. Career counselling: With more and more people finding themselves victims of a corporate downsizing, career counsellors will always be in demand. Career counsellors guide their clients into a profession or job that will help them be both happy and productive as an employee.
7. Communications: Communications consultants specialize in helping employees in both large and small businesses better communicate with each other, which ultimately makes the business more efficient and operate smoothly.
8. Computer consulting: From software to hardware, and everything in between, if you know computers, your biggest problem will be not having enough hours in the day to meet your clients' demands!
9. Editorial services: From producing newsletters to corporate annual reports, consultants who are experts in the editorial field will always be appreciated.
10. Executive search/head hunter firms: While this is not for everyone, there are people who enjoy finding talent for employers.
You can choose any of the above fields other than these top 10 such as Gardening, Grantsmanship, Human resources, Insurance, Marketing, Payroll management, Public relations, Publishing, Taxes, Writing services.

  1. Certain qualities of consultancy firm must have:
  1. Expert knowledge in their field: As per definition “consultant is hire to provide expertise knowledge in their respective fields.
  2. Identify problems: Consultants are hire by clients to identify the problems which are not identified by management.
  3. Supplement the staff: A consultant is hire to supplement the requirements of staff. Even though a consultant's fees are generally higher than an employee's salary, over the long haul, it simply makes good economic sense to hire a consultant.
  4. Act as a catalyst: The consultant can do things without worrying about the corporate culture, employee morale or other issues that get in the way when an organization is trying to institute change.
  5. Provide objectivity needed by client: A good consultant provides an objective, fresh viewpoint--without worrying about what people in the organization might think about the results and how they were achieved.

  1. Consultants are hired to Teach: A consultant must be willing to keep up with new discoveries in their field of expertise--and be ready to teach new clients what they need to stay competitive.
  2. Bring new life to organisation: A consultant is hire to bring innovative ideas in business and make business work with new efficiencies and effectiveness.
  3. Create new business: There are consultants who have become experts in this field. Not everyone, though, has the ability to conceive an idea and develop a game plan.
  4. Influence other people: The consultants are needed to change the environment of business. To change the present environment and this can be happen by influencing people. Hence consultant must have influential ability.

  1. Taxability
  1. Service tax
Management consultancy Business services are taxable under the purview of service tax. General exemption under service tax is:
  1. Small Service Provider: Vide Notification No 33/2012-ST, dated 20.06.2012 – Exemption to Small service providers having taxable turnover of less than 10 Lakhs and providing services other than by way of under a brand name.
  1. Income tax
As per Section 194J of The Income Tax Act, 1961 TDS is to be deducted at the rate of 10% on any amount paid to any resident as:-
  1. Fee for professional services
  2. Fees for technical services
  3. Royalty or
  4. Any sum referred in Section 28
Professional services means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or Technical consultancy or interior design or advertising or other profession as is notified by the board for the purpose of Section 44AA.
Other profession notified by the board for the purposes of section 44AA are – “ profession of authorised representative”, “Profession of the film artist” and “profession o f company secretary”.
Other relevant points regarding Section 194 J
    1. Where any sum referred to in this section is credit to any account whether called “suspense account” or by any other name in the books of accounts of the person liable to pay such sum, such crediting shall demeed to be credit of such sum to be credited to the account of the payee and the provision of section 194J shall apply accordingly.
    2. The person deducting TDS shall issue a tax credit certificate in Form 16A indicating the amount paid and TDS deducted thereon.

Businesses certainly understand what consultants are. In 1997 U.S. businesses spent just over $12 billion on consulting. Hence we can say that consultancy business is profitable business India.


Post a Comment